no way in hell the board will vote to dilute the commons
This is where your argument fails. The conversion will happen before the companies are released, which means it would be FHFA (and not FnF's current boards of directors) that would agree to it. FHFA has no fiduciary duty to current shareholders, as has been established by several courts.
No, the capital will be raised through the sale of Junior Preferreds.
Sounds like you ignored Calabria's desire for FnF to have their core capital be mostly in the form of common equity. Recapping with prefs only would violate that principle. Not to mention that if FnF are ever designated as non-bank SIFIs they will have hard and fast CET1 capital standards that can only be met with common equity.
You also say this so authoritatively. How do you know that this is the method of recap? An inside source?
And if it's just reasoning on your part, you will need to provide it. As it stands, your statement that the recap will be done entirely with non-cumulative prefs has no logic or sources backing it up. Saying "you'll see" only makes your position weaker, because it proves that you really haven't even thought it through. It smacks of wishful thinking, a common thread on this board.
GSE boards are controlled by FHFA. If they want to settle the lawsuits and reduce dividend obligations by $2b annually by converting JPS to common, they have sole authority.